An increasingly tense standoff between a B.C. First Nation and a London, Ont.-based coal company in a remote mountain valley known as Sacred Headwaters is set to erupt as protesters flaunt their month-long presence on a drilling site and taunt the RCMP to arrest them.

For the Tahltan First Nation, which has worked both with and against industry, the stakes are high: It is determined to halt the development of an open-pit coal mine in a spot it views as the land of origin, the birthplace of all waters.

"We dare Fortune to get us arrested. We have cameras here. We will make sure the world knows what's going on," said Rhoda Quock, spokeswoman for the protest group Kablona Keepers, in a statement.

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Fortune Minerals Ltd., which has invested $100-million to develop what it says may be the world's biggest undeveloped deposit of high-quality, clean-burning coal, has no intention of giving up on the Arctos Anthracite project.

It sees the potential to create some 1,500 direct and secondary jobs – employment opportunities it says many Tahltan are interested in, despite their leaders' opposition.

Tensions rose this week when B.C. Premier Christy Clark's government appointed a mediator to resolve the dispute, but suggested in the statement – which it later said was prematurely released – that the mediation process would allow the Arctos project to proceed.

It was the second time the Tahltan felt betrayed by Ms. Clark: Prior to a hotly contested provincial election in May, Ms. Clark vowed to protect the Sacred Headwaters from oil and gas development. But while making that politically popular promise, Ms. Clark was seeking Ottawa's permission for a "substitution," a measure in federal omnibus legislation that lets the province forgo a federal environmental assessment in favour of a provincial assessment alone.

While B.C. had long sought to streamline the dual environmental assessment process, the Headwaters manoeuvre was seen as a blatant betrayal by the Tahltan, who had danced and drummed in the Legislative Rotunda celebrating Ms. Clark's commitment to a two-year discussion about permanent protection of the Headwaters. It was a jubilant time for the Tahltan, who had just won an eight-year battle against Royal Dutch Shell PLC, which had planned to drill for coal-bed methane in the Sacred Headwaters.

As Shell withdrew, the province extended a four-year moratorium on oil and gas activity in the area (which has some of the richest mineral deposits in North America) and hinted at further restrictions on industry there, heading off a confrontation over environmental issues and native rights. The deal was followed by a signing ceremony in Victoria – a display of exuberance that has been replaced with cynicism.

"We wonder if they were trying to keep us quiet," says Tahltan elder Millie Pauls. "There were a lot of politics heading into the provincial election. Now it seems they are trading off some of our land for their jobs agenda."

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Author Wade Davis, who has a 35-year history in the northwest as a park ranger and guide and owns a summer home on the only road to the proposed Fortune coal mine, is one of the Tahltan's leading allies. His book The Sacred Headwaters argues that the area is a wilderness of global significance, rivalling Banff, Jasper or Yosemite.

"It seems inconceivable that the B.C. government could ask the second-largest company in the world to leave and then fast-track plans for a small coal company from London, Ont., to extract coal from those same Headwaters," he said.

Tahltan elder August Brown, who was arrested in a 2005 blockade, is adamant in his opposition. "We're tired of fighting but I know it's my path. If they try to put a mine up there, there are enough of us to tear them apart."

Nothing is more sacrosanct to the Tahltan than the Sacred Headwaters – a high, wide valley 400 kilometres just hours south of Alaska. There, the Stikine, Skeena and Nass salmon rivers that nourished aboriginal cultures of the Pacific Northwest originate in an area known to First Nations as Klabona, or Klappan. According to native myth, the Big Raven forged the world in that valley.

"The Klappan has always been a bottom line for us," says Annita McPhee, president of the Tahltan Central Council. "It's who we are. We come home in the summer. We depend on the fish. We trap and hunt. We depend on the moose. There are some things that money cannot buy. Our food sources are one of them. Water is another."

Ms. McPhee insists that her people are not indiscriminately anti-development. She points to "productive relationships" with companies like BC Hydro, Alta Gas and Nova Gold. Earlier this year, the Tahltan were the first band in B.C. to negotiate a revenue-sharing deal for proceeds of the Forest Kerr hydroelectric project, estimated at $2.5-million a year.

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But, Ms. McPhee says, Tahltan leaders have made it clear to the province and Fortune Minerals that an "ecologically and culturally destructive coal mine project" in the Sacred Headwaters is a non-starter.

B.C. mining ministry spokesman Matt Gordon defends the decision to seek a substitution to speed up the assessment process, saying the Shell deal did not cover mining activity in the Headwaters.

And Fortune chief operating officer Mike Romaniuk points out that mining is a completely different business. "Our project will have less impact and great collateral benefit to the province and other industry. … The Shell project was a hundred times larger in terms of disturbance to the landscape."

Fortune, which has pursued its big coal dream since 2002, says it is encouraged by B.C.'s application to take over the environmental assessment. Company president Robin Goad says the Klappan deposit is perhaps "the largest undeveloped resource of anthracite in the world, the highest quality coal there is … and a rare source of a critical raw material for steel-making and metal processing."

Demand is growing for the product in Asia, and last year Fortune Minerals acquired a major partner in the form of South Korean steel giant Posco.

Mining sector success is key to the economic development plan crafted by the B.C. Liberals, which estimates eight new mines for the province by 2015. The province has requested substitution of environmental assessments for five projects, four of which are metallurgical coal developments like Arctos Anthracite.

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The author of a study comparing the provincial and federal environmental assessment provisions says the two processes are not equivalent. "The nub of my concern is that the provincial process lacks the thoroughness and public participation provisions of federal environmental assessments," says Mark Haddock of the University of Victoria's Environmental Law Centre. "Ninety-nine per cent of projects have been historically approved under B.C.'s EA process. One gets the sense that the B.C. government does not like saying 'no' to industry."

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